Saturday, September 22, 2007

The cost of tax expenditures approximate the level of total discretionary spending, “yet relatively little is known about the effectiveness of tax incentives in achieving the objectives intended by Congress,” Walker told the panel. He said too little attention is paid to those tax provisions — which are tax exemptions, deductions, credits and preferential rates in the tax code. He noted that the mortgage interest deduction alone cost the government $68.3 billion in lost revenue in 2006, more than the $42.4 billion spent on HUD. But while HUD programs get a performance review from OMB each year, there is no equivalent check on the effects of tax policy. Congress and administration should develop a system of periodic review of tax policies to “identify and mitigate against mission fragmentation, overlap, and conflict, as well as service gaps,” Walker said.

Walker also said the unintended consequences of tax breaks are not well examined, citing health insurance as an example. The tax exclusion for a company that buys health insurance premiums for its employees cuts costs for those employees, while increasing the tax burden on those who purchase their own insurance. CBO Director Peter Orszag also highlighted the impact of tax policy on health insurance, calling it the “most prominent example of a tax expenditure that appears to be inefficient.” The tax preferences for an average worker amount to a government subsidy of more than 30 percent of the cost of health care provided through employer-sponsored insurance, he said. “By reducing the price of that insurance, the tax subsidy encourages workers to purchase coverage through their employer and to secure more-extensive policies, increasing the share of costs that is covered and decreasing the share that is paid out of pocket.” That, he said, helps to inflate health care spending.

Here's a link to the referenced testimony of Comptroller General Walker. Here's one for CBO Director Peter Orszag. First off, let me object to the choice of verbs. It may be repetitive to note it, but tax breaks don't 'cost' the government revenue; taxes cost the taxpayers. That said, it only makes sense to do the best we can to understand the effects of tax breaks intended to promote certain outcomes. How much does the federal government 'spend' in the form of tax breaks, intended to promote desired outcomes? This chart from Walker's testimony is illustrative and surprising:

The chart confirms that our government 'spends' more on tax breaks than it does in discretionary spending. (Entitlements meanwhile, grow inexorably -- but let's leave that for another post.) As a conservative, I want simplicity in the tax code whenever possible, and I want the smallest tax bite possible. If a given tax break is not achieving the desired goal, it should be eliminated in favor of overall tax reduction. To do that however, I need an assessment of the effectiveness of tax breaks.

The biggest tax break, according to Walker, is the incentive for employer-provided health care -- $188 billion annually. And what do we buy with that money? The screwed-up system we currently have -- which subverts patient choice, encourages higher health costs, and drives providers mad. That's why many free-market health care reform plans begin by repealing the existing tax preference.

What about other such preferences? There's a significant amount of attention to the federal government's discretionary spending, but relatively little to the revenue foregone in the tax code. It's worthy of greater scrutiny.

The highlight of Novak's column today -- his recognition of how well Rudy played the MoveOn/Petraeus conflict:

Rudy Giuliani scored a hit with conservative activists by getting ahead of his Republican presidential competitors in blasting Sen. Hillary Clinton for not denouncing MoveOn.org's attack on Gen. David Petraeus.

Giuliani caught the spirit of Republican rage over the left-wing MoveOn.org's full-page ad in The New York Times. On the day Petraeus presented his report on Iraq, the ad demeaned him as "General Betray Us." Giuliani asked: "Who should America listen to -- a decorated soldier's commitment to defending America, or Hillary Clinton's commitment to defending MoveOn.org?"

If the nomination went to the candidate who demonstrated the most tactical shrewdness, it would probably be Giuliani. From his debate slam against Ron Paul for supposedly suggesting that the US brought on the 9/11 attacks, to the request to the NYTimes for discounted ad rates, to his critique of Hillary for not standing up to MoveOn, Giuliani has been very good at seeing opportunities and taking advantage of them.

I've commented before that one of Hillary's big problems in the general election is that voters want change. For 20 years, the president has been either a Clinton or a Bush. Are the voters really going to want 4 (or 8) more years of a Clinton?

Hillary Rodham Clinton: She is clearly the frontrunner and I have learned over the years to never bet against a Clinton. Based on solid historical data, I didn't think she could win in New York in 2000 and I have since learned that there are two political playbooks in the U.S. today: One marked "The Clintons" and the other, "We Mortals." On the pro side, Clinton has experience, the flexibility to sense where the firestorm of criticism may be coming from and to adjust her message and demeanor, her husband as both the sharpest political mind in the nation today and as a personality to rally the Democratic base, and considerable charm that wears well with her obvious intelligence. She has also neutralized to a great degree the doggedness and arrogance that led to the defeat of her health-care plan in 1994. As for cons, she is the lightning rod and can energize the other side to come out to vote against her. Questions abound among Democrats as to whether she can win. And perhaps most significantly, a 2008 voter will have to be at least 46 years of age to have cast a ballot in a presidential election where a Bush or a Clinton wasn't an option. So a campaign that argues for a fresh face and a different kind of experience might hurt her. (Likely scenario: She runs and wins two terms as president, then serves one term as chairman of the Federal Reserve, then converts to Catholicism and rides out her final years as Pope).

'A campaign that argues for a fresh face and a different kind of experience...' I bet any of the leading Republican contenders would wage just that sort of campaign against her. In the general election, she can definitely be beaten.

Friday, September 21, 2007

The Former Spook looks at reports that about 30 Iranian and Syrian soldiers were killed while working on the chemical warhead of a SCUD missile:

Still, something about this account doesn't quite add up, for several reasons. First, it doesn't take a team of 30 (or more) people to mount a chemical warhead on a SCUD, even if the Iranians and Syrians were experimenting with some sort of prototype. An experienced load crew consists of roughly than a dozen technicians, with a small crane and a limited amount of support equipment. Missile warheads are designed to be loaded quickly and efficiently, under combat conditions, and with a minimal "signature." If the Syrians and Iranians had a small crowd involved in the loading operation, they were inviting trouble.

Joe Biden was in Iowa and not voting, so it appears that 20 Democrats joined 49 Republicans and Joe Lieberman to defeat this.

If twenty Republicans had crossed the line and joined the Democrats on some issue the Times would hail it as a bipartisan triumph. But here, a 28-20 split amongst the Senate Democrats signals a solidification of a partisan divide.

CQ Politics lists the candidates who are looking at Minnesota's 3rd Congressional district -- currently represented by Jim Ramstad:

Republicans who confirmed to CQPolitics.com that they are considering a run for the 3rd District seat are state Sens. Geoff Michel, David Hann and Warren Limmer, as well as state Rep. Erik Paulsen of Plymouth. Other possible GOP candidates include Brian Sullivan, a member of the Republican National Committee who in 2002 pursued the Republican nomination for governor; former state Rep. Jeff Johnson, who ran for state attorney general in 2006; former state Sen. David Gaither; and state Rep. Kurt Zellers.

On the Democratic side, state Rep. Melissa Hortman said she was “very seriously considering” a run for the nomination, and state Sen. Steve Simon said he was considering a bid. They could be joined by Hubert H. “Buck” Humphrey IV, a 2002 candidate for Minnesota secretary of state and grandson of the state’s most famous Democrat, a longtime senator who also served as vice president of the United States and was the 1968 Democratic nominee for president.

Other possible Democratic contenders for the 3rd District seat include former federal prosecutor Andy Luger, who ran for Hennepin County attorney in 2006; state Sen. Terri Bonoff from Ramstad’s hometown of Minnetonka; and former state Sen. Steve Kelley.

Minnesota's Third District is classically Republican; it consists of Minneapolis' prosperous western suburbs and some surrounding rural area. Like many such districts, however, it has been trending toward the Democrats. Bill Clinton carried the Third twice, but President Bush edged out John Kerry there in 2004.

Another district sure to host a competitive race (and a costly one for the Republicans). It's also one that could be affected by presidential coattails -- since Tim Pawlenty is sometimes mentioned as a possible GOP vice-presidential nominee.

For weeks, Democrats have been keeping their fingers crossed for Bob Kerrey to announce that he was jumping back into politics to run for an open Senate seat in Nebraska.

But that, of course, would require Mr. Kerrey to leave New York City. And that has become such a sticking point that Democratic Party officials in Nebraska and Washington are grudgingly conceding that they think it is highly unlikely he will run for the Senate.

The officials haven’t lost all hope – Mr. Kerrey is headed back to Nebraska for a quick weekend trip, perhaps the Midwestern air will influence his thinking – but they are all but certain he will not enter the race to fill the seat of retiring Senator Chuck Hagel.

Without Kerrey, this race moves from 'tossup' to 'likely Republican.'

On the Left, there's definitely a whiff of that old Barry Goldwater 'I'd rather be right than popular' philosophy:

Obviously if the choice is between Dem/Rep control of the Senate or a filibuster-proof/non-filibuster proof majority I'd prefer Kerrey to enter the Nebraska race. But as those thresholds are unlikely to be critical, I hope he does, indeed, stay out of the race.

My feelings on Kerrey are a bit more mixed than those of Atrios, who asks Kerrey to "stay out of the race." I have more than a few profound policy differences with Kerrey, not the least of which Social Security (which I tend to think we shouldn't privatize, even partially) and Iraq (I tend to think it would be better to end the war than keep it going indefinitely without purpose).

Does this sound like something that the Netroots would have said in 2006? I would argue not. In that long-forgotten era, the Left wanted to win -- first and foremost. The new interest in ideological purity could help the GOP.

Were these 'fishing expeditions,' or was the FBI going after something specific; and,

What did they get?

The answer to the first question is clear. Their informant participated in taping the calls, so they must have been after something specific:

AP reports: "Allen, a wealthy businessman and Stevens' political patron, agreed to the taping last year after authorities confronted him with evidence he had bribed Alaska lawmakers. He pleaded guilty to bribery and is a key witness against Alaska legislators. He also has told prosecutors he paid his employees to renovate the senator's house..."

The AP added: "Beyond the calls Allen made while cooperating, prosecutors also have thousands of conversations the FBI recorded while secretly wiretapping phones belonging to Allen and fellow VECO executive Rick Smith. Agents also secretly videotaped meetings between contractors and state politicians at a hotel suite in Juneau, Alaska's capital."

The answer to the second question -- what Stevens may or may not have said on the tape -- will undoubtedly be revealed with time.

Either way, it looks like Ted Stevens' re-election bid is now officially in Dire Straits.

Idle thought: I wonder if the court decision upholding the immunity of Congress from office searches has led/will lead the FBI to be more aggressive in sting operations against elected officials, such as this one.

It's not usually a good idea to take Nancy Pelosi too seriously; she often makes little sense. But given that she is the Speaker of the House -- and therefore third in line to the presidency -- you can't ignore her entirely.

In responding to the president's stated intention to veto the proposed expansion of the State Children's Health Insurance Program (SCHIP), Ms. Pelosi claims that President Bush is saying 'I forbid 10 million children in America to have healthcare.' If this were true, the president would certainly be a monster.

But if Ms. Pelosi's logic is that denying a federal subsidy for something is equal to forbidding people from having it, then she is a monster of inhuman proportions. Does she believe Uncle Sam should buy every American kid a pony (or two)? How about tickets to Wiggles concerts, piano lessons, after-school snacks, and a weekly trip to Dairy Queen? Why does she think America's kids shouldn't have access to these staples of American life? And if the rule applies to kids, it applies to adults. Why is Speaker Pelosi forbidding me to have a plasma television and an in-ground pool?

My argument is as silly as Speaker Pelosi's of course, but when the facts are against you, you try to throw up dust.

Once her son is off to school, Laura Mansfield settles in at her dining room table with her laptop and begins trolling Arabic-language message boards and chat rooms popular with jihadists.

Fluent in Arabic, the self-employed terror analyst often hacks into the sites, translates the material, puts it together and sends her analysis via a subscription service to intelligence agencies, law enforcement and academics.

Occasionally she comes across a gem, such as when she found a recent Osama bin Laden video — before al-Qaida had announced it.

"I realized, oh my gosh, I'm sitting here, I'm a fat 50-year-old mom and I've managed to scoop al-Qaida," said Mansfield, who uses that name as a pseudonym because she receives death threats.

In fact, the introduction with "sharp challenges" by Bollinger makes the situation even more of a disgrace. Now there will be the appearance of real dialogue, of Ahmadinejad answering challenges, which further legitimizes the notion that Holocaust denial, say, is a subject of legitimate and reasonable debate. But if Bollinger had chosen to deny Ahmadinejad's request, or not to dignify Ahmadinejad's appearance by his presence--then Bollinger would have been denied the opportunity to lecture us, in Columbia's press release, to this effect: "It is a critical premise of freedom of speech that we do not honor the dishonorable when we open the public forum to their voices. To hold otherwise would make vigorous debate impossible. That such a forum could not take place on a university campus in Iran today sharpens the point of what we do here....This is America at its best."

I can't overstate the significance of a win in this seat. In an off-year, political analysts and the media at large look to the very few swing seat races as a sign of which way the political winds are blowing. They read the tea leaves and their chatter helps define the expectations of the year ahead. In 2007 there are few races of national significance -- governor's races in Louisiana and Kentucky, a House race in Ohio to replace the late Paul Gillmor, and probably a few others.

But none of these will really be seen as a 'fair fight.' The GOP will likely lose the Kentucky race because of a scandal-tarred incumbent; we'll win in Louisiana. The same will be true in Gillmor's seat in Ohio. But none of those is perceived as a race that could go either way. The Ogonowski/Tsongas race -- while clearly a Democratic-leaning seat -- could be won by the GOP.

And because it clearly leans Democrat, a win by Ogonowski would attract a lot of attention. With few other data points to look at, analysts would have to consider the possibility that a backlash has begun against the Democratic Congress -- and that Republican candidates could win in marginal -- even Democrat-leaning seats. That would improve recruiting and fundraising. In that sense, a win by Ogonowski would have an enormous effect.

Recall that before the GOP sweep in 1994, they won several elections in 1993 that indicated a backlash was developing against Bill Clinton. Christie Whitman won in New Jersey; Rudy Giuliani in New York; Ron Lucas won in Kentucky (in early 1994). These races led analysts to expect that 1994 was going to be a Republican year. That drove recruiting and fundraising, and led to what I consider a virtuous cycle.

It would be insane to predict a Republican sweep in 2008 because of a win by Ogonowski, but it would help. Right now analysts are predicting more Democratic gains in 2008. Democrats are favored in the House and Senate, as well as the presidential race. If a Republican wins a left-leaning seat in Massachusetts on a message that Congress is broken and that the American people don't want an amnesty for illegal immigrants, it will boost GOP chances next year.

Wal-Mart, long criticized for its health care coverage, unveiled a broad plan yesterday that is intended to cut employee costs, expand coverage and offer workers thousands of cheap prescription drugs.

Starting Jan. 1, Wal-Mart's insurance will look a lot like that offered by many other American companies, but with some twists that even longtime critics described as innovative. Independent experts praised several features of the plan and said it could represent a turning point for the retailer, the nation's largest private employer.

...

Helen Darling, president of the National Business Group on Health and a former benefits consultant, called it "a very good plan," saying that "parts of it, like the $4 generics, are game-changing for the industry."

...

The new program, for which workers can sign up starting this month, offers 50 ways to customize coverage, with varying trade-offs like higher premiums and lower deductibles.

In one plan, for example, an employee would pay premiums up to $79 a month, receive a health care credit of $100 and pay a deductible of $500. In another, the employee would pay premiums of $8 a month, receive a $100 health care credit, but pay a deductible of $2,000. Though many generic drugs will be available for $4, brand-name drugs will cost $30 to $50.

If the proverbial alien arrived from Mars to assess our system of health care, he would be shocked to learn that it so intricately and deeply involves our employers. This artifact needs to be ended.

Regular readers of this blog are aware that I am a Yankees fan, although I try not to indulge myself about baseball excessively. Nevertheless, occasionally my nature as a fan comes through.

After the way the Red Sox blew their lead last night, I had to check the Boston papers to see the reaction of Red Sox nation. This piece from the Herald is enough to warm the heart of the Big Stein:

The Red Sox swallowed a bitter, 4-3 loss to the Toronto Blue Jays last night, though their magic number nonetheless dwindled to four. That is all that stands between the Sox and a fourth playoff spot in the past five years. Yet because their lead in the AL East has been trimmed to a mere 2 ½ games on the hard-charging New York Yankees, many Sox followers simply cannot help themselves.

We’ll never make it. We’re doooooooooooomed.

“It means a lot, but it means nothing as far as winning a World Series,” Sox manager Terry Francona said before the game when asked about the importance of a division title. “It means a lot for what you set out to accomplish, I think. I don’t think there’s any getting around that, and I don’t think we want to. But when it’s all said and done, it won’t have any bearing on how far we get into the postseason.”

Some of us thought Red Sox history changed forever in 2004. We thought the inferiority complex went out with the 86-year drought, the Curse of the Bambino, and all the other nonsensical stupidities that unnecessarily burdened a franchise and its followers.

Maybe we were wrong.

Maybe Red Sox fans need something silly to worry about because they are unhappy unless they are miserable.

Lest there be any doubt, the Sox are in tune-up mode with regard to the postseason. For them, at least, the Yankees are not as much of a concern as Eric Gagne, Daisuke Matsuzaka or Hideki Okajima. The Sox now lead the Detroit Tigers by seven games with 10 to play, and they are not about to sacrifice potential postseason success simply so they can say they won the division.

“Is it going to make or break things? No,” Red Sox captain Jason Varitek said of a potential division title. “Do I want it? Yeah...”

So really, what’s more important here: when you play, or against whom?

Sure the Red Sox have blown 12 games out of their 14.5 game division lead. Sure they've lost 5 of their last 6 to the Yankees, and 11 out of their last 21 overall. What's really important is getting into the playoffs. This swoon? Just a tune-up.

This Herald columnist has it wrong. What's really important is neither who you play or when you play, it's how you're playing. And if you're playing poorly enough to blow a 14.5 game lead, and to lose a lead of 2.5 games with just 10 games left to play, then you're not playing well enough to go very far. How many teams can you think of that crumbled in the stretch and then rebounded to win titles? Thought so.

The Red Sox aren't doomed, but if they do blow their division lead, it will be a sign that you shouldn't expect anything from them come the postseason.

Tuesday, September 18, 2007

The Department of Homeland Security says by the end of fiscal 2007 — 12 days away — it will have added 70 miles of new fencing along the border with Mexico.

DHS spokesman Brad Benson said in an interview that as of Monday the department had built 64.5 miles of fencing. A month ago, DHS had finished only 13 new miles, he said.

The department aims to build more than three times that — 225 miles of border fence — next fiscal year, for a total of 370 miles of fencing along the southern border when added to 75 miles of pre-existing border fence, Benson said.

This does at least put paid to the worst fears of border security proponents -- that the fence would never be built, right?

If you're afraid of flying, consider a seat at the back of the plane. You may find yourself close to the bathrooms and you may have to wait for your soda, but there might be compensatory benefits:

MYTH: It Doesn't Matter Where You SitREALITY: It's Safer In the Back.

The funny thing about all those expert opinions: They're not really based on hard data about actual airline accidents. A look at real-world crash stats, however, suggests that the farther back you sit, the better your odds of survival. Passengers near the tail of a plane are about 40 percent more likely to survive a crash than those in the first few rows up front.

That's the conclusion of an exclusive Popular Mechanics study that examined every commercial jet crash in the United States, since 1971, that had both fatalities and survivors. The raw data from these 20 accidents has been languishing for decades in National Transportation Safety Board files, waiting to be analyzed by anyone curious enough to look and willing to do the statistical drudgework.

Disclaimer: accidents in air travel are extraordinarily rare. And air travel is far safer than driving. But if you're one of those that wants to minimize your risk, the info might come in handy.

Celebrating the muslim new year in Afghanistan, American soldiers were invited to attend. One of us performed a decent rendition of Van Morrison's "Brown Eyed Girl" and the rest of us can't sing anyway.

A sign of progress in the battle for hearts and minds? Obviously, it proves nothing -- except that good Irish music unites people of all cultures and backgrounds. Still, it's nice to see Americans and Afghans getting along so well.

The recent incident in which a female passenger complained that she had been required to 'cover up' as a condition of traveling on Southwest has led plenty of people to come out of the woodwork, apparently. Now an obese passenger has come forward to complain that he was required at the last minute to purchase an additional ticket, given that he was too large to fit completely in one seat:

I can understand his being upset at being required to make the purchase at the last minute, and his surprise at being so required when he never had been before.

Is there a better alternative, though? Presumably any airline with such a rule would prefer to err 'heavily' on the side of not upsetting the passenger and risking loss of future business. And since few flyers buy their tickets in person, the first opportunity you have to determine whether a customer needs a second ticket is at check-in. Unless you propose to insert a pop-up on the ticket purchasing screen where you acknowledge that if you are over 300 pounds, you might require an additional ticket.

More generally, if the practical effect of a person's size is that he or she must use two seats -- ie, if it's plainly impossible to sit another passenger in the seat adjacent -- then it would be foolish of them not to require an additional ticket -- at least on a full flight, right? If you have to deny a flyer the right to travel, and preserve an open seat for this gentleman, then you have to charge him -- don't you? I have no way of knowing if that was the case here, just saying that I can see clear circumstances where this policy is really a no-brainer.

And of course, if you're an average person -- anywhere in the 150-200 pound range, you have to be thankful that at least one airline is 'looking out for you,' right?

Sunday, September 16, 2007

One thing to consider: in deciding how aggressively to act against Iran and Syria, Israel is likely to take into account the stances of the leading US presidential contenders. To the extent that our candidates make it clear that they will not tolerate a nuclear Iran, Israel may feel less compelled to act against Iran -- and to act quickly, before a less friendly US government is installed.

Update: Also check out Dan Riehl, who highlights an important point -- Syria's air defense is superior to Iran's:

IT was just after midnight when the 69th Squadron of Israeli F15Is crossed the Syrian coast-line. On the ground, Syria’s formidable air defences went dead. An audacious raid on a Syrian target 50 miles from the Iraqi border was under way.

At a rendezvous point on the ground, a Shaldag air force commando team was waiting to direct their laser beams at the target for the approaching jets. The team had arrived a day earlier, taking up position near a large underground depot. Soon the bunkers were in flames.

Even the makers of the device are at a loss to explain exactly how it works - but sceptical independent scientists carried out their own tests and discovered that the 12in x 2in tube really does produce far more heat energy than the electrical energy put in.

The device seems to break the fundamental physical law that energy cannot be created from nothing - but researchers believe it taps into a previously unrecognised source of energy, stored at a sub-atomic level within the hydrogen atoms in water.

I believe that Iraq is going to go down in history as the greatest disaster in American foreign policy. That means that I am acknowledging it is worse than Vietnam," she told the group.

Really? Greatest disaster? Worse even than sleepwalking through the 1990s, while Al Qaeda bombed our embassies abroad, bombed the Cole, attacked our soldiers in Saudi Arabia and planned the attacks of September 11?

How can a serious contender for the presidency let a surrogate say such foolish things?